© 2013 The Texas Lawbook.
By David S. Coale
Contributing Writer for The Texas Lawbook
Mandatory arbitration. Klein v. Nabors Drilling involved an employee manual that had an arbitration clause, but also talked about trying first to mediate employment disputes. 710 F.3d 234 (5th Cir. 2013). The Court found that while the employer’s dispute resolution program encouraged mediation, it still required arbitration if other options did not succeed. This opinion provides useful tips for the common contract situation where a party wants to both facilitate early dispute resolution and preserve a desired forum if the case does not settle.
Daubert. The plaintiff, struck by an Amtrak train while driving his truck, sued and offered a witness on the issue of safety at the intersection. The Fifth Circuit found the witness’s opinions “transparently subjective,” noting that he relied solely on “education and experience” and could not tie his opinions to specific railroad safety standards (while admitting that Amtrak had satisfied the most applicable government rules). Brown v. Illinois Central Railroad, 705 F.3d 531 (5th Cir. 2013). The opinion also faulted the expert report for presenting a lengthy background section about rail regulation that had no connection to the ultimate conclusions. The opinion is a good reminder that Daubert discourages expert testimony that essentially says: “It is so because I say it is so.”
Personal jurisdiction. The plaintiff in Irvin v. Southern Snow Manufacturing bought a shaved-ice machine in Louisiana, moved it to Mississippi for her snow cone business there, and then injured herself while using the machine. The Court found that when the plaintiff “unilaterally transported” the machine to Mississippi, that act was not “purposeful availment” of Mississippi by the Louisiana-based manufacturer, and thus Mississippi courts had no personal jurisdiction over it. No. 11-60767 (5th Cir. March 13, 2013, unpublished). This concept places an important limit on tort jurisdiction based on a “stream of commerce” theory, and also may guide jurisdiction disputes in contract cases where the place of performance is under the control of the defendant.
Injunctive relief and trade secrets. The Court largely affirmed a preliminary injunction about pharmaceutical development in Daniels Health Sciences v. Vascular Health Sciences, reviewing the standards for proof of a trade secret and irreparable injury. 710 F.3d 579 (5th Cir. 2013). The opinion offers practical guidance in an important area that is not often reviewed by the Court in a published opinion.
Mortgage servicing. The 2008 recession led to widespread defaults and home loans and a “foreclosure crisis.” Many homeowners sued for alleged errors and misrepresentations by lenders and servicers, often arising during failed negotiations about a potential loan modification. In a series of unpublished opinions this year, the Court has rejected claims against mortgage servicers and lenders involving the Statute of Frauds, negligent misrepresentation, estoppel, waiver, the validity of a MERS assignment and the tort unreasonable collection efforts.
BONUS: Monks can sell caskets. A Benedictine monastery near New Orleans started to make and sell funeral caskets. Funeral home operators, harmed by this new competition, pressed for and obtained a law requiring caskets to be sold in Louisiana by a licensed funeral director. This law was struck down as unconstitutional under “rational basis” review. St. Joseph Abbey v. Castille, ___ F.3d ___, No. 11-30757 (5th Cir. March 20, 2013). While laws are rarely struck down under this deferential standard, the Court wrote on its importance when it does call for judicial action: “The deference we owe expresses mighty principles of federalism and judicial roles. The principle we protect from the hand of the State today protects an equally vital core principle – the taking of wealth and handing it to others . . . as ‘economic’ protection of the rulemakers’ pockets.”
David Coale is a partner at Lynn Tillotson Pinker Cox who specializes in appellate law. He writes a blog on the Fifth Circuit called “600 Camp.” David can be reached at dcoale@lynnllp.com.
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